Rigel’s VEPPANU Launch Adds Growth, With Royalties and Costs Still to Absorb

Rigel Pharmaceuticals has begun selling a new breast cancer medicine that could expand its business beyond the blood disorders and cancers that have supported its revenue. VEPPANU generated $6.6 million in net sales from its August 13 launch through September 30, accounting for about 9% of the company’s third-quarter product revenue. Those initial sales are meaningful for Rigel, but the economics will depend on sustained demand after royalties, development spending and the cost of building the launch.

The early contribution also changes how investors should read management’s forecast. Rigel’s 2026 revenue guidance excludes VEPPANU, even though the drug is included in reported results. Its fourth-quarter results will therefore offer a clearer view of both the established portfolio’s trajectory and the medicine’s first full quarter on the market.

A targeted treatment with an established comparator

Rigel sells medicines for conditions including chronic immune thrombocytopenia, a disorder in which the immune system destroys blood platelets, and certain forms of leukemia and lung cancer. VEPPANU, or vepdegestrant, adds a breast cancer treatment to that portfolio. Rigel acquired worldwide rights from Arvinas and Pfizer after U.S. approval, and is responsible for its commercialization and development.

VEPPANU is an oral medicine designed to target and degrade the estrogen receptor, a protein that can help drive the growth of some breast cancers. The FDA approved it for adults with advanced or metastatic breast cancer that is estrogen receptor-positive, HER2-negative and carries an ESR1 mutation, following progression on at least one endocrine treatment. An FDA-authorized test must identify the mutation. The eligible market is therefore a subset of patients with breast cancer, defined by disease stage, tumor characteristics, mutation and treatment history.

In the randomized VERITAC-2 trial, 270 of 624 participants had an ESR1 mutation. Among that mutation-positive group, median progression-free survival, the time before cancer worsened or the patient died, was five months with VEPPANU versus 2.1 months with fulvestrant, an injectable endocrine therapy. Participants had previously received one or two lines of endocrine therapy, including a CDK4/6 inhibitor. Overall survival data were immature at the analysis. The FDA also notes warnings concerning heart-rhythm changes and embryo-fetal toxicity.

VEPPANU enters a market with another oral option. The FDA has approved ORSERDU for postmenopausal women or adult men with ESR1-mutated, ER-positive, HER2-negative advanced or metastatic breast cancer after endocrine therapy. VERITAC-2 compared VEPPANU with fulvestrant, so its results do not establish how it performs against ORSERDU. Testing, physician choice, coverage and the ability to keep patients on therapy will affect the commercial opportunity.

The launch contributed to revenue growth

Rigel’s third-quarter filing shows total revenue rose to $80.9 million from $69.5 million a year earlier. Net product sales increased to $72.3 million from $64.1 million, while collaboration and other contract revenue rose to $8.6 million from $5.4 million.

Figures are rounded. The filing reports prior-year GAVRETO sales of $11.0 million; Rigel’s earnings release states $11.1 million.

VEPPANU accounted for approximately $6.6 million of the $8.2 million increase in product sales. TAVALISSE, the largest product, grew 3%; Rigel attributed its quarterly increase to a higher price per bottle and favorable revenue-reserve changes, partly offset by lower volume. REZLIDHIA grew 20%, while GAVRETO fell 11% as lower volume more than offset a higher price. The established portfolio still supplied most product revenue, but the new launch provided most of the quarterly increase.

Sales growth did not translate into higher companywide earnings in the quarter. Operating income fell to $17.1 million from $28.4 million as total costs and expenses rose to $63.8 million from $41.0 million. Research and development expense increased to $18.3 million from $7.4 million, and cost of product sales rose to $10.8 million from $4.8 million. Rigel cited development programs, launch costs and personnel among the drivers. Net income also reflected a $4.2 million tax provision, compared with a $0.3 million tax benefit a year earlier.

Rigel does not disclose VEPPANU’s stand-alone profit or margin. The companywide expense increase includes other activities, including its R289 development program, so it cannot be assigned entirely to the new product. For the first nine months, reported net income was $39.1 million versus $99.0 million a year earlier; the 2025 figure included $40.0 million of noncash collaboration revenue from releasing a cost-sharing liability.

Guidance leaves out the new medicine

Rigel now expects about $290 million to $295 million of 2026 revenue excluding VEPPANU, up from the previous $285 million to $295 million range. Within that forecast, expected sales of the other three products narrowed to $255 million to $260 million from $255 million to $265 million. Expected contract revenue rose to approximately $35 million from approximately $30 million.

Through September, those three established products generated approximately $187.6 million in net sales. The updated forecast therefore implies roughly $67.4 million to $72.4 million in fourth-quarter sales from them, compared with approximately $65.7 million in the third quarter. These are calculations from the company’s rounded figures; they are a guide to the forecast, not a projection for VEPPANU.

Because reported revenue includes the new drug while the annual forecast excludes it, comparing full-year reported revenue directly with the guidance range would overstate any outperformance. VEPPANU’s fourth-quarter sales should be assessed separately, alongside evidence of repeat prescriptions and access. Management said it shipped the drug to more than 100 patients and clinics combined in the first six weeks and had seen refills; it did not disclose a separate patient count or quantify refill rates.

The license carries continuing costs

The license agreement gave Rigel worldwide rights in exchange for a $70 million upfront payment made in June. Another $2.5 million became payable after a transition activity was completed, and up to $12.5 million remains conditional on further transition activities. Arvinas and Pfizer are also eligible for up to $60 million in regulatory milestones and $260 million in sales milestones if specified thresholds are met.

Rigel owes tiered royalties ranging from the mid-teens to the mid-twenties as a percentage of annual net sales, subject to adjustments. It must also reimburse costs of ongoing studies up to an aggregate $40 million cap through 2029; it recognized $7.3 million of related research and development expense in the first nine months of 2026. Separately, its Pfizer supply agreement included an estimated $24.8 million in minimum purchase obligations at September 30, with none expected to be due in the rest of 2026.

These commitments make the revenue-to-profit conversion central to the license’s value. Rigel recorded the acquired license as an intangible asset and amortizes it over an estimated 15 years; royalties enter cost of product sales as sales occur. The initial payment used cash when paid, while its accounting cost is recognized over time. The available disclosures do not yet isolate the drug’s full contribution after these costs.

Cash generation and the next report

Rigel ended September with $99.3 million in cash, cash equivalents and short-term investments, down from $155.0 million at the end of 2025, and had $8.0 million outstanding on its revolving credit facility. The facility’s maximum is $40 million, but actual availability depends on an eligible borrowing base, so the difference is not automatically available liquidity.

The nine-month cash-flow statement shows $67.9 million of cash generated from operations, compared with $39.1 million of net income. Noncash stock compensation and deferred tax expense helped bridge the two, partly offset by working-capital outflows that included higher inventory and receivables. Rigel paid $70.6 million for intangible assets and $55.3 million to repay its previous term loan and related fees. It also drew $40.0 million and repaid $32.0 million under its revolving facility. Net sales and maturities of investments supplied $61.6 million of cash, which explains why changes in cash alone do not show the full movement in liquid resources.

Rigel expects positive full-year net income, and its established portfolio gives it an existing source of cash generation while VEPPANU is introduced. The next useful measure is the medicine’s sales in its first full quarter, supported by evidence of refills and patient access. Growth that persists as launch spending and royalty obligations are absorbed would make the license more valuable to Rigel; a single partial-quarter sales figure cannot yet establish that outcome.